Using Real Estate Brokers to Find Self-Storage Properties

Relationships make a huge difference in the world of self-storage. The expression, “It doesn’t matter what you know, it matters who you know.” was invented for real estate. It matters what you know, but when you are getting started, it is important to build relationships. Your power team can help you through your first few transactions. You need to know what to watch out for and what hurdles to avoid, but your team will be critical.

Good real estate brokers will know what properties are on the market, which ones are good deals and which ones are overpriced. You may be in an area that is large enough that there is a broker that specializes just in self-storage. If not, you will be working with commercial agencies that work with self-storage in addition to their other commercial offerings. No matter which type of agent you find, you need to understand that the way that you approach that agent is going to make a huge difference in your relationship with them.

From the moment that you say hello to a Realtor, they are going to be vetting you to see if you are someone that they want to spend their time working with. They don’t want to waste their time finding property for someone who isn’t going to close on the transaction. They want to make sure that you are a sure thing before they even send you a list of potential opportunities. Because of this, you need to be prepared before you call them.

The first thing that you are going to ask a commercial Realtor is if they have any junk self-storage properties. They see properties all the time that they don’t want to work with because they know that it isn’t going to sell and if it does it is going to have to be sold significantly lower than expected. They still must market these properties and create selling packages for these properties even though they believe that they may not sell. This is an opportunity for you. Tell them that you would like a shot at the junk before they put it on the market. See if they will give you 24 to 48 hours’ notice on the junk before it goes out to everyone. They may not be willing to do this until you have performed a few times.

Be prepared to answer questions on how you are going to close the transaction. Realtors want to know that you can perform. You should have already spoken to a commercial lender. If you haven’t, ask them who they work with and then plan on calling that lender right away. The nice thing about commercial real estate is that the property helps pay for itself. This means that they don’t expect you to have a pre-approval letter. They just expect you to know what you can do approximately.

You can tell the agent that you have a group of investors that you work with. You don’t know what price range you are looking for until you see the property’s numbers. Let them know that when you find the right opportunity, you will take it to your lender and evaluate it. Your biggest limitation to great opportunities is how much you must put down. However, if you find a great self-storage facility, you can usually find investors.

When you are interviewing the agent, ask them questions about their experience with self-storage too. Have they sold self-storage facilities in the past. How many? When was the last time they sold one? What lender did they use for that transaction? How long did the transaction take from start to finish? What hiccups did they hit, learn from other people’s mistakes. How long have they been selling self-storage? How long have they been in commercial real estate?

If you are brand new to self-storage and you cannot find a Realtor with experience in self-storage, then you need a mentor who can walk you through potential pit falls. You don’t want to learn what to avoid the hard way.

Make sure that you sound professional when you are talking to your potential Realtor. If you haven’t done self-storage before, that is o.k. as long as you have done some kind of real estate investing. If you haven’t done any investing, then you need to make sure that you present yourself to the agent in a way that they will feel that you are worth their time.

Come up with a script. Include what type of property you want to buy. What the minimum requirements for that property are. Where do you want to buy self-storage? Do you have a maximum price range or just a minimum size? What type of CAP rate are you looking for? What kind of upside potential do you require? You need to know these things before you start talking to the agent. Preparation will make you sound like you have the experience that they are looking for. As always, happy investing.